Removal of fire assessment called good business sense

July 9, 2013

The decision made by City Manager John Szerlag to not include a fire assessment in the proposed fiscal year 2014 budget is mostly seen as good business sense by Cape Coral decision makers.

But if you expect it to shrivel up and die, you will probably be disappointed.

On Friday, Szerlag sent a seven-page memo to the City Council regarding his decision to exclude the fire assessment and to keep the millage unchanged, saying it was done to allow time for the Circuit Court to determine if the "ready to serve" fire assessment will hold up in the event of a suit.

"Because of the time constraints of our budget, the validation does not occur until after the council approves the budget," Szerlag said. "We want to budget for 'what is' and not 'what might be.' We'll get the bond validation and issue a bill with the fire assessment and keep our promise to reduce the millage rate one mil."

Szerlag said the decision shows fiscal discipline, in that the city is not spending money it isn't sure it'll have.

"If we budgeted under the assumption of a fire assessment and a one mil decrease and later the courts found something wrong with the fire assessment, that will cost the city $30 million," Szerlag said.

This will allow the bond validation to fast-track its way through the judicial system and get the green light it needs to proceed, or get rejected, Szerlag said.

The ready to serve method is a two-tiered approach, charging a flat fee for all properties, improved or not, then another fee based on the value of the improvement.

For now, the average homeowner, who was expected to pay $150 annually in order to reach the citywide goal of $20 million, will only pay about $65 per year, which will come from the public service tax.

That will leave the city $6.5 million to be used for road paving, as this was the highest priority identified by citizens in a survey, the memo states.

The remainder, which will come from the fire assessment and one mil reduction, is expected to occur via budget amendment in early 2014, Szerlag said.

Connie Barron, the city's information director, said the remaining $85 at that time will likely come in the form of a bill, which will reflect the millage decrease of $9.2 million the "checkbook approach," as the city called it.

Councilmember Marty McClain said that while the fire assessment methodology has passed muster in court for most municipalities and that many cities have a mechanism in place for the PST and fire assessment, they do not have bond validation for it.

"If we were to put it into force and there was some component that didn't add up, it keeps the city from collecting money that shouldn't be collected," McClain said, "It's simple math. It's simple to understand and it's a wheel that's already been used."

McClain praised the city and staff for its handling of the situation. But, not everyone has sung his or her praises. Some critics, from inside the council and out, are disappointed it has come this far and that the bond validation is but a speed bump in passing the fire assessment.

"I hope they relook at this because the property values are up 7 percent and they don't need this," said Steve Lovejoy, president of CapCapeTaxes, his advocacy group. "It's a good thing they stop and look at it."

That said, Lovejoy doesn't hold out much hope, and that even the $6.5 million the city has left isn't needed.

"It's a bump in the road to them and they're going to continue on the path. They don't see the light and are trying to get more revenue in," Lovejoy said. "They have $250 million sitting in bank accounts. They don't need it."

Councilmember Chris Chulakes-Leetz said he couldn't give a fair opinion until the budget comes before council. However, he did question the consistency of Szerlag's management tactics.

"I'm disappointed by the erratic management style. These things should have been thought out before they were brought forward," Chulakes-Leetz said. "They did it to get it through prematurely. "